A US housing market recession has left banks worldwide with nonperforming assets on their balance sheets, causing the collapse of some financial institutions and leading to a global credit crunch.
The crisis has forced governments to take stakes in some big banks to infuse capital into the financial system and has led central banks to cut interest rates.
But those actions have come too late to avert a global recession, analysts say, and the downturn in the United States is expected to be deep and long.
"Job losses are now piling up. In the first eight months, when the recession was in low gear, average monthly payroll jobs were cut by 108,000," said Brian Fabbri, managing director of economic research at BNP Paribas in New York.
"In the past two months the monthly average payroll job loss has speeded up to 262,000. In comparison, this cycle is beginning to produce more job losses than the last three recessions," he said, referring to downturns in 2001, 1990-1991 and 1981-1982.
The US manufacturing sector has been the hardest hit, shedding 90,000 jobs in October.
It was closely followed by the construction sector, where employment fell by 49,000. Construction employment has fallen by 663,000 since peaking in September 2006.
Steep job losses have also been recorded in the retail, financial and service sectors. The only bright spots in October were the healthcare and mining sectors, which added 26,000 and 7,000 positions, respectively.
"Unfortunately, the current scenario is probably more like 1980-1982, as job losses have likely only begun to occur from recent events," said Miller Tabak's Crescenzi, referring to the seizing up of credit markets in October.
"More is on the way. The last time that there were three months of large declines was in the 1980-1981 and 1981-1982 recessions," he said.
(China Daily via Agencies November 25, 2008)
